In this article, we discuss 10 dividend stocks to buy according to James Katz’s Humankind Investments.
Humankind Investments is a quantitative asset management firm that specializes in socially responsible investments. The hedge fund invests in companies that positively influence the fund’s policy and offer profitable returns for shareholders. James Katz is currently serving as the chief investment officer of the firm and has substantial experience working in the ETF industry.
In one of his interviews with TD Ameritrade Network, Katz mentioned that investors should focus on ESG-centric companies and a quantitative approach to ESG investing provides a better measure of societal impact. He further elaborated that the performance of healthcare companies like Pfizer Inc. (NYSE:PFE) and Johnson & Johnson was instrumental in bringing the vaccines during the pandemic, due to their biomedical research. Similarly, search engines like Google provide valuable information to their users for free. This is where his hedge fund’s main focus lies.
Humankind Investments’ first exchange-traded fund, the Humankind US Stock ETF, reached over $111 million in assets under management in 2021 and gained 16.88% since its inception in February 2021. The fund selects securities that benefit humankind and create value for investors, customers, and general members of society. It further aims to involve and engage companies to improve their overall impact on humanity. At the end of 2021, the fund released its first annual benefit report, highlighting its accomplishment of the public benefit mission.
As of the end of Q1 2022, Humankind Investments holds a 13F portfolio valued at about $244.4 million, down from $248.2 million in the previous quarter. Some of the firm’s major holdings include Pfizer Inc., Johnson & Johnson, and Alphabet Inc. (NASDAQ:GOOG).
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Our Methodology:
In this article, we discuss 10 dividend stocks in James Katz’s portfolio. We picked these stocks from the Q1 portfolio of Humankind Investments.
Top 10 Dividend Stocks to Buy According to James Katz’s Humankind Investments
10. Deere & Company (NYSE:DE)
Dividend Yield as of June 28: 1.43%
Humankind Investments’ Stake Value: $1,767,000
Deere & Company is an American manufacturing company that specializes in agricultural machinery, heavy equipment, and forestry machinery. In June, the company announced moving its tractor cab production to Mexico from Iowa due to a tight labor market that has raised costs for domestic manufacturers.
Humankind Investments opened its position in Deere & Company during the first quarter of 2021, with shares worth over $1.8 million. During Q1 2022, the hedge fund reduced its stake in the company by 3%, owning a total stake worth over $1.7 million. The company represented 0.72% of James Katz’s portfolio.
Deere & Company has a very long track record of dividend payments, offering quarterly payouts consecutively since 1990. In the past five years, the company has raised its dividend at a CAGR of 11%. It currently pays a quarterly dividend of $1.13 per share, raising it by 8% in May. The stock’s dividend yield came in at 1.43%, as of June 28. In June, Cowen initiated its coverage of Deere & Company with a Market Perform rating and a $396 price target, appreciating the company’s strong agricultural business.
As per Insider Monkey’s Q1 2022 database, 66 hedge funds were bullish on Deere & Company, up from 61 in the previous quarter. The collective value of these stakes is over $2 billion. Bill & Melinda Gates Foundation Trust was one of the company’s prominent shareholders in Q1.
Just like Pfizer Inc., Johnson & Johnson, and Alphabet Inc., Deere & Company is one of the notable holdings of Humankind Investments.
ClearBridge Investments mentioned Deere & Company in its Q1 2022 investor letter. Here is what the firm has to say:
“Industrials holding Deere (NYSE:DE) was also a strong contributor to performance during the quarter. Through its unmatched 5,000 dealer network across 160 countries, Deere is a major global player in agricultural, construction and forestry equipment, with a particularly dominant position in U.S. agriculture. Deere’s moat around its core equipment capabilities, coupled with years of substantial investments in technology and innovation, further extends its competitive advantage into precision agriculture, which allows for higher farm yields with lower use of fertilizers, pesticides and water, thereby improving farmers’ bottom lines while reducing their environmental footprint. In addition to drought conditions in Latin America, the war between Russia and Ukraine, two major exporters of corn and wheat, is further disrupting the global agricultural commodities market and pushing prices even higher. This should mean higher farmer revenues and greater demand for Deere’s equipment, which is further supported by some of the lowest levels of inventory of new and used equipment on record.”
9. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of June 28: 2.56%
Humankind Investments’ Stake Value: $1,898,000
The Procter & Gamble Company is an Ohio-based consumer goods company that deals in a wide range of personal care and hygiene products.
According to Insider Monkey’s Q1 database, The Procter & Gamble Company was a popular buy among elite funds, as 72 hedge funds owned stakes in the company, up from 67 a quarter earlier. These stakes hold a collective value of over $6 billion.
The Procter & Gamble Company has raised its dividend consistently for the past 66 years, falling into the category of Dividend Champions. On April 12, the company announced a quarterly dividend of $0.9133 per share, up 5% from the previous dividend. Deutsche Bank lowered its price target on The Procter & Gamble Company in June to $171 but kept a Buy rating on the shares, as the stock outperformed the broader market in the past year, gaining 4.86% as of June 28.
At the end of Q1 2022, Humankind Investments owned 12,419 PG shares, valued at roughly $1.9 million. The company made up 0.77% of James Katz’s portfolio.
8. HCA Healthcare, Inc. (NYSE:HCA)
Dividend Yield as of June 28: 1.24%
Humankind Investments’ Stake Value: $1,919,000
HCA Healthcare, Inc. (NYSE:HCA) provides healthcare services to consumers, owning hundreds of hospitals and clinics across the US. The company plans to collaborate with McKesson to create a fully integrated oncology research organization to improve cancer treatment options for patients.
HumanKind Investments started investing in HCA Healthcare, Inc. during the first quarter of 2021, purchasing shares worth $868,000. During Q1 2022, the hedge fund increased its position in the company by 1%, taking its total stake to nearly $200 million. The company accounted for 0.78% of James Katz’s portfolio. In June, Loop Capital initiated its coverage of HCA Healthcare, Inc. with a Buy rating and a $240 price target, expecting nearly 3% growth in the company’s volume and higher revenues in the upcoming quarters.
First Eagle Investment Management mentioned HCA Healthcare, Inc. in its Q3 2021 investor letter. Here is what the firm has to say:
“HCA Healthcare owns and operates 185 hospitals and approximately 2,000 sites of care in the US and UK. Admissions to its facilities, depressed during the worst of the Covid-19 outbreak in 2020, have begun to rebound. HCA reported a nearly 20% year-over-year increase in admissions during the second quarter and a 14% increase in revenue, and forecast that volume would continue to improve throughout the year. We maintain our positive opinion of the company’s management team, believing them to be effective stewards of both the balance sheet and HCA’s business operations.”
7. American Water Works Company, Inc. (NYSE:AWK)
Dividend Yield as of June 28: 1.77%
Humankind Investments’ Stake Value: $2,046,000
American Water Works Company, Inc. (NYSE:AWK) is a New Jersey-based public utility company that provides water and wastewater services in the US.
During Q1 2022, Humankind Investments purchased additional 2,229 AWK shares, boosting its position in the company by 22%. The hedge fund owned 12,361 shares in American Water Works Company, Inc. at the end of March 2022, valued at over $2 million. The company represented 0.83% of James Katz’s portfolio.
On April 27, American Water Works Company, Inc. raised its quarterly dividend for the 14th consecutive year to $0.655 per share. The stock’s dividend yield was recorded at 1.77% on June 28. Janney Montgomery upgraded American Water Works Company, Inc. to Buy from Neutral, presenting a positive outlook on the company’s operations.
At the end of March 2022, 33 hedge funds in Insider Monkey’s database owned stakes in American Water Works Company, Inc., compared with 31 a quarter earlier. These stakes are valued at over $1.12 billion. Among these hedge funds, Impax Asset Management was the company’s leading shareholder in Q1.
6. Pfizer Inc. (NYSE:PFE)
Dividend Yield as of June 28: 3.11%
Humankind Investments’ Stake Value: $2,167,000
Pfizer Inc. is a leading pharmaceutical and biotech company based in New York. At the end of Q1 2022, Humankind Investments owned 41,859 PFE shares, valued at over $2.1 million. The hedge fund increased its position in the company by 10% during the quarter, which accounted for 0.88% of James Katz’s portfolio.
On April 20, Pfizer Inc. announced a quarterly dividend of $0.20 per share, consistent with its previous dividend. The company’s dividend is safe as it has been paying dividends consistently for the past 334 quarters while holding a 12-year track record of dividend growth. The company’s payout ratio stands at 28% and its yield came in at 3.11%, as of June 28. During Q1 2022, Pfizer Inc. paid over $2.2 billion to shareholders in dividends.
In June, Piper Sandler raised its price target on Pfizer Inc. to $87, with an Overweight rating on the shares, appreciating the company’s strong vaccine revenues.
At the end of Q1 2022, 79 hedge funds in Insider Monkey’s database owned stakes in Pfizer Inc., declining from 83 in the previous quarter. The collective value of these stakes is over $4.1 billion, compared with $5 billion worth of stakes owned by hedge funds in Q4 2021.
Just like Johnson & Johnson and Alphabet Inc., Pfizer Inc. is also gaining ground among analysts and investors.
ClearBridge Investments mentioned Pfizer Inc. in its Q4 2021 investor letter. Here is what the firm has to say:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.
5. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of June 28: 2.54%
Humankind Investments’ Stake Value: $2,424,000
Johnson & Johnson is one of the oldest multinational corporations that specialize in pharmaceuticals, medical devices, and consumer products. The company’s Janssen unit recently announced that its Tremfya drug has shown improvement in many symptoms of psoriatic arthritis over two years. The patients saw improvement in disease severity, with low rates of radiographic progression.
On April 19, Johnson & Johnson announced a 6.6% hike in its quarterly dividend to $1.13 per share. The company has been raising its dividend consistently for the past 60 years. Moreover, from 2017 to 2021, it generated $59.6 billion in free cash flow and paid $49.9 billion in dividends. The stock’s dividend yield was recorded at 2.54% on June 28.
Humankind Investments initiated its position in Johnson & Johnson during the fourth quarter of 2020, purchasing shares worth $308,000. At the end of Q1 2022, the hedge fund owned 13,678 shares in the company, worth $2.4 million. The company represented 0.99% of James Katz’s portfolio. In June, Daiwa initiated its coverage of Johnson & Johnson with an Outperform rating and a $180 price target.
At the end of Q1, Arrowstreet Capital was the largest shareholder of Johnson & Johnson, owning stakes worth over $1.1 billion. Overall, 83 hedge funds tracked by Insider Monkey reported holding positions in the company, the same as in the previous quarter. The collective value of these stakes is over $7.4 billion.
Distillate Capital, an investment firm, discussed Johnson & Johnson in its Q2 2021 investor letter. Here is what the fund said:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
4. Bunge Limited (NYSE:BG)
Dividend Yield as of June 28: 2.74%
Humankind Investments’ Stake Value: $2,530,000
Bunge Limited (NYSE:BG) is a Missouri-based food company that specializes in fertilizers, edible oil, and wheat products.
At the end of Q1 2022, Humankind Investments owned 22,834 shares in Bunge Limited, valued at over $2.5 million. The hedge fund sold over 400 BG shares, trimming its position by 1%. The company represented 1.03% of James Katz’s portfolio.
Bunge Limited froze its quarterly payout at $0.50 per share from 2018 to 2020, however, the company has raised its dividend twice since then. On May 12, the company announced a 19% growth in its quarterly dividend at $0.625 per share. In Q1, it paid $82 million in dividends to shareholders, up from $79 million paid during the same period last year. The stock’s dividend yield was recorded at 2.74% on June 28.
Old West Investment Management mentioned Bunge Limited in its Q1 2022 investor letter. Here is what the firm has to say:
“Bunge (pronounced BUN-GEE) Ltd is one of the biggest agribusinesses and food companies in the world. There are four worldwide companies that dominate the sector, the others being Archer-Daniels-Midland Cargill, and Dreyfuss. One of our favorite ways to screen for new ideas is following insider buying. When I saw the Form 4 filed by new Bunge CEO Greg Heckman, his purchase of $9 million of BG stock intrigued me. My initial thought was the company gave him the stock as a signing bonus. I contacted BG Investor Relations and asked whether it was a signing bonus or did Heckman actually write a check for $9 million. IR assured me it was his own hard-earned money that he invested in the company he was about to run.
Heckman was a long time executive at Conagra Foods who obviously sensed opportunity at BG. One of his first moves as CEO was to move the company’s HQ from New York to St. Louis, right in the middle of America’s breadbasket. BG had been plagued for years with poor decisions by underperforming management. Heckman’s decision to move to St. Louis was indicative of a no-nonsense style and he would commence cutting expenses and selling non-core assets…” (Click here to see the full text)
3. Corteva, Inc. (NYSE:CTVA)
Dividend Yield as of June 28: 1.03%
Humankind Investments’ Stake Value: $4,201,000
Corteva, Inc. (NYSE:CTVA) is an American agricultural chemical company that produces pesticides, bio-fertilizers, hybrid corn seeds, and other related products.
Though Corteva, Inc. started paying dividends in 2019, the company’s consistent payouts and dividend growth have analysts optimistic about the company’s financial health. Since 2019, the company has raised its dividend twice and its current dividend stands at $0.14 per share. As of June 28, the stock’s dividend yield was 1.03%. In June, Barclays presented a positive outlook on the fertilizer industry and initiated its coverage on Corteva, Inc. with an Overweight rating and a $71 price target.
Aristotle Capital Management mentioned Corteva, Inc. in its Q1 2022 investor letter. Here is what the firm has to say:
“Corteva Agriscience, one of the world’s largest seed and crop protection companies, was a primary contributor for the quarter. Due to its respected brand and the value-added benefits of its patented seeds and crop protection solutions for farmers, Corteva has been able to more than offset input cost inflation with sustainable price increases. In addition, the company’s ongoing mix shift to higher-margin, premium products, a catalyst we previously identified, is aiding both sales and profit growth. Shares were likely also buoyed by the rise in crop prices. Market participants, perhaps eager to chase short-term trends, poured into the sector. At Aristotle Capital, we look past such gyrations and, as long-term investors, do not attempt to predict short-term changes in commodity prices. We remain excited about what we view to be high-quality characteristics and fundamental improvements that permeate Corteva’s business, not the least of which include its pricing power.”
2. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of June 28: 5.05%
Humankind Investments’ Stake Value: $4,324,000
Humankind Investments made its first purchase in Verizon Communications Inc. (NYSE:VZ) during the first quarter of 2021, worth over $2.1 million. After a year, the hedge fund owned 84,886 VZ shares, valued at $4.3 million. The company accounted for 1.76% of James Katz’s portfolio.
Verizon Communications Inc. currently offers a quarterly dividend of $0.64 per share. The company maintains a 14-year streak of consistent dividend growth. From 2017 to 2021, the company generated $63.2 billion in free cash flow and paid $48.8 billion in dividends. The stock’s dividend yield came in at 5.05%, as of June 28. Moreover, in May, Morgan Stanley picked Verizon Communications Inc. as one of its top picks for high dividend growth, with an estimated yield of 5.3% in 2022.
As of the quarter ended in March 2022, 69 hedge funds tracked by Insider Monkey owned stakes in Verizon Communications Inc., up from 63 in the previous quarter. The collective value of these stakes is over $4.12 billion. Fisher Asset Management was the company’s leading shareholder in Q1.
Weitz Investment Management mentioned Verizon Communications Inc. in its Q4 2021 investor letter. Here is what the firm had to say:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
1. Cisco Systems, Inc. (NASDAQ:CSCO)
Dividend Yield as of June 28: 3.51%
Humankind Investments’ Stake Value: $4,990,000
Cisco Systems, Inc. (NASDAQ:CSCO) is a California-based technology company that provides cloud and other security services to consumers. The company announced to exit Russia in wake of the Ukrainian war, stopping its sales and services in the country.
On June 6, Cisco Systems, Inc. announced a quarterly dividend of $0.38 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 11 years. As of June 28, the stock’s dividend yield came in at 3.51%.
At the end of Q1 2022, Cisco Systems, Inc. was the eighth-largest holding of Humankind Investments. The hedge fund owned 89,496 CSCO shares, valued at nearly $5 million. The company accounted for 2.04% of James Katz’s portfolio. Highlighting the current supply chain issues, Morgan Stanley lowered its price target on Cisco Systems, Inc. in May to $46, with an Equal Weight rating on the shares.
ClearBridge Investments mentioned Cisco Systems, Inc. in its Q3 2021 investor letter. Here is what the firm has to say:
“We reinvested a portion of the proceeds into existing holding Cisco Systems, Inc., which also has highly valuable technology and an improving secular growth story with its leading position in core networking hardware, as well as in its growing software and services business. Cisco Systems, Inc. has refocused on winning share in the large and growing hyperscale market and has been investing aggressively in R&D to support growth. We believe Cisco has found new legs after previously ceding some growth opportunities in cloud while maintaining its strong presence in the carrier and enterprise markets. Cisco Systems, Inc. boasts a strong balance sheet and accelerating multiyear growth while trading at a modest multiple of earnings.”
You can also take a look at 10 Best Fertilizer Stocks To Buy Now and 10 Stocks to Sell According to Billionaire Daniel Sundheim
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Disclosure. None. Top 10 Dividend Stocks to Buy According to James Katz’s Humankind Investments is originally published on Insider Monkey.
